June 18, 2018

Fitbit employees charged with stealing trade secrets from ex-rival Jawbone

After a long, drawn-out trade-secret battle between Fitbit and Jawbone, 6 Fitbit employees have been hit with a federal indictment

6 current and former Fitbit employees have been hit with a federal indictment over the theft of trade secrets from one-time rival, and early bluetooth wearables pioneer, Jawbone.

The indictment alleges each defendant knew that the trade secrets were stolen and that they were possessed without authorization.

According to court documents, the individuals had all worked for the now-defunct Jawbone for at least a year between 2011 and 2015, before being employed by Fitbit.

Which is right when it all began

Shortly after Fitbit filed for an IPO in 2015, Jawbone filed 3 lawsuits in less than two months against their wearables foe for attempting to  “systematically plunder” talent, intellectual property, and trade secrets (300k confidential files-worth).

In 2016, a judge ruled in Fitbit’s favor finding that “no Jawbone trade secrets were misappropriated or used in any Fitbit product, feature, or technology.”

However, the fight continued over the other patent discrepancies, until the companies reached a global settlement agreement resolving all outstanding litigation in December 2017.

But by then, Jawbone had already gone out of business

Founded in 1999, the company was one of the OG makers of bluetooth headsets before they diversified into fitness bands and speakers (one of the early innovators in the revolutionary Jambox craze).

According to The Information (paywall), the consumer electronics firm was once valued at $3B, but their early success was swiftly overshadowed by other copycat competitors (like Fitbit), plus costly mistakes in design and manufacturing, that eventually led to their demise in 2017.

And now, here we are again 

Jawbone co-founder and CEO Hosain Rahman has since founded a health-related software and hardware company called Jawbone Health that will be servicing not only Jawbone’s devices moving forward, but also the new litigation. 

In a statement to The Verge, Jawbone Health said these indictments further validate their claims made back in 2015.

The 6 employees are scheduled to make a first court appearance on July 9, and could face up to 10 years in prison if convicted.

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